posted at 2:31 pm on October 14, 2013 by Allahpundit

A little something to put you in the right frame of mind for that big Dem/GOP kumbaya meeting at the White House at 3. He tried to panic the markets to increase his leverage two weeks ago and it didn’t work; two weeks later, with Reid and McConnell in crunch-time negotiations, I guess it was time to try again.

After endless heavy media coverage of the congressional stalemate, no one who’s following the story even casually is unaware of what hitting the ceiling would mean. He’s not imparting useful information to the public by saying this, in other words. What he’s doing is trying to startle investors by suggesting that, behind the scenes, the risk of default might be greater than they know.

Talking to reporters at an event in Washington D.C. Monday, President Obama said the U.S. faces “a good chance at defaulting.”

“This week if we don’t start making some real progress, both the House and the Senate, and if Republicans aren’t willing to set aside their partisan concerns in order to do what’s right for the country, we stand a good chance of defaulting. And defaulting could have a potentially have a devastating affect on our economy,” the president said.

As I write this, after a modest early dip, the Dow has rallied on news of the Reid/McConnell negotiations and is up a few points on the day. Either the market is dismissing his default chatter as the leverage ploy that it is or it simply doesn’t take his pronouncements on this subject seriously enough anymore to let any real money turn on them. What’s risky about him trying to talk down the Dow to light a fire under Republicans in Congress is that, if you’re among the relative few there who think hitting the ceiling wouldn’t be so bad economically or might even be good(!), you might take the fact that markets haven’t blinked at all the doomsaying lately as evidence that technical default wouldn’t be the disaster that experts say it is. So, aces all around here, champ.

You can watch the clip of him talking about default here (at around 2:55) in, but this bit from Rand Paul yesterday is a better use of your time.

Update:Joel Pollak of Breitbart notes that some media commentators are now acknowledging openly what the strategy is here:

Now–with Republicans “on the run” in polls–National Public Radio (NPR), which has been a cheerleader for the Democrats throughout the debate, has admitted that there are attempts to drive stock prices down in an attempt to force a deal. “It’s almost like they’re begging the markets to react today to force the Senate into some sort of action, and then see what the House does,” said Cokie Roberts on Monday morning.

Roberts was describing a meeting of international bankers in Washington that warned of “dire consequences” if the U.S. did not raise the debt limit. Note that none of these government-aligned barons, warning of nascent panic in the financial markets, advised the U.S. to cut spending and manage its long-term debt–even as Democrats added new demands for spending increases. Presumably, that is a problem for a later crisis.

The White House abruptly canceled a 3 p.m. meeting at the White House among President Barack Obama, Vice President Joe Biden, and congressional leaders amid ongoing discussions on a potential deal to reopen the government and raise the nation’s debt ceiling.

The postponement came about 20 minutes before the meeting was scheduled to start…

Reid told reporters on Capitol Hill Monday morning that “we’re getting closer” to a deal, and that he hopes there will be a deal roughly in place before the meeting.

Democratic and Republican senators are working on a fiscal deal that would extend U.S. borrowing authority at least through mid-February and provide government funding until mid-January to end a two-week government shutdown, according to a source familiar with the negotiations.

The tentative framework, which is not finalized and could change, would also set up a new round of deficit-reduction negotiations that would try to strike a bargain by year’s end.

Could that pass the House? According to Guy Benson’s source, no — or rather, not without many, many Democratic votes:

Just spoke w/ House R who thinks even the Collins plan would have been DOA with his caucus. Reid's proposal deader than DOA.

Whether Boehner’s willing to violate the Hastert Rule and pass a Senate bill before Thursday is one of the two remaining big questions. The other is whether Ted Cruz or Rand Paul or Mike Lee or anyone else will halt the Senate in its tracks by objecting to Reid’s motion to waive the 30 hours of required debate after the new bill comes to the floor. That would guarantee that we hit the ceiling (unless Treasury suddenly decides that, due to fluctuating revenue figures, we actually won’t hit the ceiling until next week). I’m cautiously optimistic that Cruz et al. won’t object, for the simple reason that they can’t stop the bill entirely by doing so. All they can do by objecting is delay it an extra day or two, which would trigger a destructive technical default while achieving nothing in return. No one wants to be the guy with that on his resume. It certainly wouldn’t help Cruz in a general election down the road.

Update: As of last Tuesday, the Bipartisan Policy Center estimated that the U.S. would hit the debt ceiling somewhere between October 22 and November 1. If Reid’s bill comes to the floor today, not even an objection by Cruz or Paul could slow it to the point where that deadline is threatened — although obviously it would leave Boehner and the House with less time to act. And just as obviously, Treasury would need to endorse the later deadline in order to calm markets as we get closer to Thursday.

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

How many of you who want to “let it burn” or default or have this drag on and on just to make a point survive on Social Security and/or VA Disability payments?

rlwo2008 on October 14, 2013 at 6:26 PM

If that is taken as the default position, then there’s really no point to any fiscal discussions at all. Somebody relies on that govt. money going out the door. Why bother trying to reign it in?
Let the Ds have whatever they want because they are willing to go to the mat, and the Rs will get blamed no matter what. The Rs are withholding checks!!!

Might as well just have one party: the spending party. Sounds like fun!

That’s it — the strategy of voting and supporting the most conservative in the primary, voting republican in the general election has failed. The establishment republicans no longer deserve the vote and there are too many….take one down and another takes its place.

From now on, it’s vote 3rd party/libertarian unless there is a reliable tea party candidate on the ballot.

We’ll see how a few elections with conservatives really holding back their vote will help.

I don’t know Will seems to think the Republicans have a “hammer”. Unfortunately he didn’t get to finish because of Krauthammer interrupting him. Probably made him feel nostalgic for his ABC gig. Krauthammer also stated he didn’t care much about the name of the Redskins and then went on to prove that he cares very much.

How many of you who want to “let it burn” or default or have this drag on and on just to make a point survive on Social Security and/or VA Disability payments?

rlwo2008 on October 14, 2013 at 6:26 PM

You do know that constitutionally speaking, there can be no ‘default’ in terms of not making the payment on our debt, or our SS-related payments, right? Both are required, and the government is taking in more than enough tax dollars to pay both – you *do* know this, yes?

– The Rats gave up more spending for a mere 3 1/2 months, a demand they threw in only after the GOP El PRL, specifically Paulo Ryan, threw the end of Sequester out there in exchange for “talks” on SocSecurity.

– El PRL gave up everything regarding PlaceboCare, including their last desperate shot of being relevant on K Street again, forever.

That’s it — the strategy of voting and supporting the most conservative in the primary, voting republican in the general election has failed. The establishment republicans no longer deserve the vote and there are too many….take one down and another takes its place.

From now on, it’s vote 3rd party/libertarian unless there is a reliable tea party candidate on the ballot.

We’ll see how a few elections with conservatives really holding back their vote will help.

deploylinux on October 14, 2013

Yours is a short view of the war. This strategy is working, but not fast enough to effect the changes necessary to beat back establishment DC. The biggest impediment to the success of the strategy is in fact the establishment GOP. For example, Murkowski and Lugar were taken out in the primaries, but Murkowski found a way to circumvent her ouster and Lugar simply cowed the Indiana Republican party away from supporting the Republican who beat him in the primary. Other establishment types haven’t been beaten in primaries, such as McCain and Graham, and this is why they are still around…not because the “strategy” has failed.

A large portion of the national Republican party does not want DC and its statist ways to be interrupted. Its a long war, and the long view must be taken in gauging the success or failure of a given strategy.

I don’t know Will seems to think the Republicans have a “hammer”.
Cindy Munford on October 14, 2013 at 7:00 PM

The Sequester is the “Hammer”. The R’s aren’t giving it up by agreeing to fund the budget only until January 15 as Krauthammer says because the house could pass a clean CR at that point if the D’s don’t agree to replace the sequester with entitlement reform. And then it would be the D’s shutting down the gov because they don’t like the sequester cuts.

I don’t know Will seems to think the Republicans have a “hammer”. Unfortunately he didn’t get to finish because of Krauthammer interrupting him. Probably made him feel nostalgic for his ABC gig. Krauthammer also stated he didn’t care much about the name of the Redskins and then went on to prove that he cares very much.

Cindy Munford on October 14, 2013 at 7:00 PM

I sense a little friction between Charles and George. Charles has always been the big dog on the panel, and George’s hiring is a challenge to him.

The Sequester is the “Hammer”. The R’s aren’t giving it up by agreeing to fund the budget only until January 15 as Krauthammer says because the house could pass a clean CR at that point if the D’s don’t agree to replace the sequester with entitlement reform. And then it would be the D’s shutting down the gov because they don’t like the sequester cuts.

kcewa on October 14, 2013 at 7:18 PM

The continuation of sequester wasn’t supposed to be the Rats’ “concession” – they didn’t demand more spending until Ryan floated the idea of chucking it last week.

They’re both the spending party. Republicans give Obama whatever he wants because the media dictates obama’s talking points until everyone believes everything bad had to do with republicans. Next they’ll give him amnesty. Then democrats in charge for life.

There are 11,588,500 words of regulations added to original Obamacare law… amounting to 30 times longer than the original law itself… and all written and added by unelected bureaucrats. Just to be clear…

i think they make a mistake to have both dr. k and g will on the same panel…don’t need 2 brains of the operations/nite and should alternate them whenever possible…the 2 of them together also drown out the 3rd and makes him/her small
i agree about charles lane…anytime he can dig a republican he does.

Seriously, everybody just take a breath. This thing has so many moving parts, it has become impossible to know what’s going on at any moment in D.C. But there is one major takeaway; the leaders in both political parties in D.C. are finished (for now). That leaves a huge vacuum in getting a deal done. We are looking at a real time generational change in the GOP over this. The Dems have nothing. As a party in D.C. they are old and dying. There is no fresh blood coming from the rank and file. Otherwise Reid would not have so much sway at this moment. On the other hand, my 10 year thinks it’s great. The more both parties argue, the less they can hurt mommy and daddy.

Even if you take “Obamacare” off the table.. say you delay it for a year. This WILL NOT UNDO THE DAMAGE THAT HAS BEEN DONE.

This is why it is a futile effort at this point. Let it be implemented and let it fail. Insurance companies and employers are not going to suddenly rescind what they’ve already had to do because of Obama and his Congress.

It’s simply too late.

Let the “food stamp failure” debacle be a precurser to what is to come. I wouldn’t doubt for a minute that the food stamp failure was an intentional test.

btw, that brings up a good point…the Insurance companies aren’t too keen on the delay of the Mandate. I mean after all if only the sick people sign up without the mandated healthy people…well, you can see their point.

as with all things socialist, the wars between the various factions will only increase over time. Who gets the meds…and who gets the corn subsidies. And, right there…right there in the middle…right in the middle of the cash sit the politician.

if you look at it from strictly a material point of view, being a Pol in the Socialist Machine is a great business opportunity. Graft, payola, pay to play, not to mention power and TV fanboys loving you for your power….and your ability to reward them

Boehner’s been saying it for a while, here’s a story from over a week ago, it’s the entire premise behind raising the debt ceiling, R’s just want a way out so they’re trying to scare people with the default talk.

If the Drudge headline about unions getting a delay of Obamacare in the emerging screwing of the American people is correct, I predict there will be pitchforks on Washington. I’ve got two I’ll be bringing.

(1) RINOs per say are not the problem, but RINOs from red states are. Instead of focusing rage the few blue or purple state RINOs, the focus should be on removing those RINOs from red states where it is clear we could have someone more conservative. Lindsey Graham, McCain, Corker, Alexander, etc. are the problem. I don’t mind Kirk going off the reservation because he is from Illinois (what do we expect), but a Senator from a red state like Tennessee or South Carolina has no business going off the reservation. Same with the house…

(2) The leadership positions must be reserved for conservatives and libertarians from red states. That way the leadership and base are in harmony, or are at least in the ball park, and can be trusted by the base if they have to do a political move. The trouble now is the is the leadership in the house comes from Ohio, Virginia, freaking California, etc. Those are not base states, and those individuals have proven not to be in harmony with the base and frankly are not trusted by the base. So when they do a political move no one trust them, and why should they because they time and again sold the base out. Hence the mutiny/civil war.

(3) No republican should go to the MSM to complain about their colleagues. This is really the case with MSNBC. Pete King should be booted from the party for his numerous appearances on that network. Do you see Dems going onto Fox to attack their fellow Dems. No! The RINOs complain about Cruz hurting the party for standing up for the base yet the ones who are hurting the party the most are those RINOs that can’t jump on a Republican fast enough on MSNBC. McCain has criticized Cruz more in the last month than he has about Obama in four years.

Actually, IMHO, the rats have been running a huge con and its starting to collapse. The con was zero could get on tv and claim we were going to default just about whenever he wanted or whenever it looked like he wasn’t getting enough traction. The market would drop 100 or 150 points and he got his way. Not anymore. The market doesn’t even drop and no one believes anything he says anymore. Tough time for the Chicago liars in charge.
Problem for the regime is we got Hannity,Beck, Rush and lots of other folks all over the blogosphere who are finally figuring out that we actually take in 250 billion every month on our own without borrowing the other 15%. And, that debt service is only 22 billion per month. Therefore, the threat of collapse is just another fairy tale made up for zero by his dozen or so lawyers that keep whispering into his prompter.
the con is getting old and since everyone knows nothing will happen the 17th or even the 27th since there is plenty of dough to prevent default that argument won’t fly anymore and it was basically all they had.
So, time to negotiate.
Bet our side will still cave anyway. Even now that we have all the leverage in the world. Its just what they do when rinos run things.

“(1) RINOs per say are not the problem, but RINOs from red states are. Instead of focusing rage the few blue or purple state RINOs, the focus should be on removing those RINOs from red states where it is clear we could have someone more conservative. Lindsey Graham, McCain, Corker, Alexander, etc. are the problem. I don’t mind Kirk going off the reservation because he is from Illinois (what do we expect), but a Senator from a red state like Tennessee or South Carolina has no business going off the reservation. Same with the house…

(2) The leadership positions must be reserved for conservatives and libertarians from red states. That way the leadership and base are in harmony, or are at least in the ball park, and can be trusted by the base if they have to do a political move. The trouble now is the is the leadership in the house comes from Ohio, Virginia, freaking California, etc. Those are not base states, and those individuals have proven not to be in harmony with the base and frankly are not trusted by the base. So when they do a political move no one trust them, and why should they because they time and again sold the base out. Hence the mutiny/civil war.

(3) No republican should go to the MSM to complain about their colleagues. This is really the case with MSNBC. Pete King should be booted from the party for his numerous appearances on that network. Do you see Dems going onto Fox to attack their fellow Dems. No! The RINOs complain about Cruz hurting the party for standing up for the base yet the ones who are hurting the party the most are those RINOs that can’t jump on a Republican fast enough on MSNBC. McCain has criticized Cruz more in the last month than he has about Obama in four years.

If the Drudge headline about unions getting a delay of Obamacare in the emerging screwing of the American people is correct, I predict there will be pitchforks on Washington. I’ve got two I’ll be bringing.

Actually, IMHO, the rats have been running a huge con and its starting to collapse. The con was zero could get on tv and claim we were going to default just about whenever he wanted or whenever it looked like he wasn’t getting enough traction. The market would drop 100 or 150 points and he got his way. Not anymore. The market doesn’t even drop and no one believes anything he says anymore. Tough time for the Chicago liars in charge.
Problem for the regime is we got Hannity,Beck, Rush and lots of other folks all over the blogosphere who are finally figuring out that we actually take in 250 billion every month on our own without borrowing the other 15%. And, that debt service is only 22 billion per month. Therefore, the threat of collapse is just another fairy tale made up for zero by his dozen or so lawyers that keep whispering into his prompter.
the con is getting old and since everyone knows nothing will happen the 17th or even the 27th since there is plenty of dough to prevent default that argument won’t fly anymore and it was basically all they had.
So, time to negotiate.
Bet our side will still cave anyway. Even now that we have all the leverage in the world. Its just what they do when rinos run things.

rodguy911 on October 14, 2013 at 8:48 PM

Hell, ‘our own’ journalists and bloggers apparently don’t even understand the reality of the ‘default’ being an utter lie, and insist on continuing to discuss the situation by the ground rules and language of choice set by the liars in the first place.

Time for 10x as many people to gear up to go to DC this weekend and do the same thing again – tear them all down again, and deposit them at the WH. If they get mangled beyond repair in the process, so be it.

As I posted over at MM’s site, this reminds me of a great scene in ‘The Untouchables’, about how things get done ‘the Chicago way.’

Hell, ‘our own’ journalists and bloggers apparently don’t even understand the reality of the ‘default’ being an utter lie, and insist on continuing to discuss the situation by the ground rules and language of choice set by the liars in the first place.

Midas on October 14, 2013 at 8:54 PM
Exactamundo!
I know its been a huge problem just getting the basics out to everyone much less the fine points about distraction/diversion whenever an issue like this sucks out all the oxygen out of the air, what’s going on in the background or any of the rest.
Evidently,we have a very dumbed down leadership in both parries with, apparently, just a few running the show.

If the Feds are shutdown, how come 80% plus is not? Help me understand por favor! Those bums in Washington are STILL spending our money.

racquetballer on October 14, 2013 at 9:06 PM

Great question.
The stats I have read from the governments own numbers are that the country will borrow 600 billion within a 4 trillion dollar budget for fiscal 2014. That means the govt. already has coming in every month 85% or roughly 250 billion+. Measure that against the interest on the debt which ranges between 18 and 22 billion and its small change when you look at the totality of what is going on.
As I said before the rats were running a huge con assuming everyone was as stupid as they usually are. They got away with it for some time. Now its time to pay the piper although our piper always caves.

“(1) RINOs per say are not the problem, but RINOs from red states are. Instead of focusing rage the few blue or purple state RINOs, the focus should be on removing those RINOs from red states where it is clear we could have someone more conservative. Lindsey Graham, McCain, Corker, Alexander, etc. are the problem. I don’t mind Kirk going off the reservation because he is from Illinois (what do we expect), but a Senator from a red state like Tennessee or South Carolina has no business going off the reservation. Same with the house…

(2) The leadership positions must be reserved for conservatives and libertarians from red states. That way the leadership and base are in harmony, or are at least in the ball park, and can be trusted by the base if they have to do a political move. The trouble now is the is the leadership in the house comes from Ohio, Virginia, freaking California, etc. Those are not base states, and those individuals have proven not to be in harmony with the base and frankly are not trusted by the base. So when they do a political move no one trust them, and why should they because they time and again sold the base out. Hence the mutiny/civil war.

(3) No republican should go to the MSM to complain about their colleagues. This is really the case with MSNBC. Pete King should be booted from the party for his numerous appearances on that network. Do you see Dems going onto Fox to attack their fellow Dems. No! The RINOs complain about Cruz hurting the party for standing up for the base yet the ones who are hurting the party the most are those RINOs that can’t jump on a Republican fast enough on MSNBC. McCain has criticized Cruz more in the last month than he has about Obama in four years.

Wish I were in default with 250 billion still coming in. Who does the books in Washington anyways? Wish I could print money whenever I go broke. Wish I could go golfing at least once a month only. Wish I could spend other people’s money bitch moan and whine, saying it’s not enough.

If he pulled a default, which would require a fraud against the American people, he might hurt his Banker buddies …

although,

if Obama decides to create a default by refusing to pay the interest with money he has, pretty sure his banker buddies would get the tip off, unload what they have to before it drops, and buy it back on the rebound. Makes it all worthwhile, being an insider

Disregarding the nonsense about defaulting on our debt why isn’t shutting down this freak show the thing to do? I mean if the idiots that are our representatives cannot show some integrity then to hell with them. Would it not be better to shut down our government than to have a civil war? That is the only alternative we are going to have in a few years. Do you suppose the founding fathers who fought and died for our freedom would have been afraid to stand up for honesty?

Obama has tried many little tricks like trying to spook the markets. That’s just one more example of the sick president. But the sickest of all is the treatment of the military. If neglecting and obstructing the ones who have put their very lives on the line for their fellow countrymen does not completely outrage the American public, then we are finished. It just boils down to reflect the selfishness and immoral thinking of a country whose citizens are rotten to the core.

Obama will deliberately not pay creditors and if he for some reason does pay creditors, he will choose to screw everyone else except unions.
He will choose NOT to pay the Military or senior citizens, but will pay food stamp folks and others who vote for him.
He is a son of a B and doesn’t give a rats pa too ti about the United States of America.
I say let him default so we can IMPEACH the SOB and get rid of him once and for all.
Take his pension too!

It is for this sort of deal that a Plan B comes in handy: enforce Obamacare as written and enacted, remove all discretion from enacting it, and put anyone trying to put in illegal exemptions or waivers on the line for a $10k fine per individual it is offered to and 10 years in jail.

Even as it is Reid needs a magic 61 to go anywhere.

Then the House can point to all the legislation it has passed and say it is waiting for Reid to act on that and bring it to the floor FIRST before they consider doing anything with the great brain fart of Harry and Mitch.

The Constitution REQUIRES that the debt be paid FIRST over all other federal government bills. If Obama and the Democrats refuse to do so, perhaps its time for the military to step in and arrest them. There could be no greater dereliction of duty by this President and his party.

“This week if we don’t start making some real progress, both the House and the Senate, and if Republicans aren’t willing to set aside their partisan concerns in order to do what’s right for the country, we stand a good chance of defaulting. And defaulting could have a potentially have a devastating affect on our economy.”